The Vietnamese economy will gradually recover in 2015 with GDP growingat an expected 6.2 percent, economists told a conference in Ho Chi MinhCity on January 22.
"The economy will truly recover, albeitslowly, thanks to good macroeconomic management, stable finance andmonetary policies, low inflation, and active restructuring ofState-owned enterprises," Tran Du Lich, a member of the NationalAssembly's Economic Committee, told the Vietnam Economy Scenario 2015conference.
To accomplish this, he pointed out that theGovernment has adopted a consistent macroeconomic policy for the lastfour years focusing on stabilising the economy rather than growing it atany price.
But he said the recovery is contingent on threeimportant conditions — economic stability, clear and transparent legalsystem, and a business-friendly administration.
"A stable macroeconomy would help companies predict the future, while a clear andtransparent legal system would help them feel secure about investing anddoing business. And a business-friendly administration would help themimprove their efficiency."
He said 2015 would be a year of intensive integration and the "opportunity is promising and challenges are real."
"Vietnamis tweaking its legal system in line with the ASEAN bloc and this willcreate favourable conditions for companies to develop and integrate."
By2015 Vietnam must complete a zero-tariff list which will include 93percent of all goods while the remaining 7 percent can carry tariffs ofup to 5 percent until 2018.
Eleven laws will be amended and take effect by the middle of the year.
VoTri Thanh, Deputy Director of the Central Institute of EconomicManagement, agreed with Lich that the economy would recover in 2015.
"Institutional renovation will need more effort but the risk will remain very high."
Accordingto deputy head of the Central Economic Commission Le Vinh Tan, theeconomic pitfalls include challenges to sustainability, growth fallingshort of potential, production inefficiency, high public debts andpressure to repay, high ratio of bank bad debts and their slowresolution, and significant fall in oil prices.
Le Xuan Nghia,member of the National Financial and Monetary Policy Advisory Council,said: "If Vietnam does not have proper fiscal policies, interest rateswill go up. Therefore fiscal policies must dovetail with monetarypolicies to keep interest rates steady or even bring them down and keepinflation under 5 percent."
He also mentioned the biggest risk for economic growth in 2015 is process to deal with bad debt.
"The legal system is not robust enough to cope with bad debts because they are governed by 11 different laws.
"TheGovernment should speedily improve the legal system [which] wouldimpact State Owned Enterprises' restructure speed and economicdevelopment."
He also listed smuggling and commercial fraud as other risks facing the economy.
"Reform of the legal system is the most important task in ensuring sustainable economic growth in the long term."
DominicMellor, the Asian Development Bank's country economist for Vietnam,warned however that it would not be easy for Vietnam to integrate intothe ASEAN Economic Community.
"Vietnam faces the challenge oftransitioning from central planning toward a more open economic model inwhich the private sector leads growth and development.
"Thelegacy of central planning and the continued lack of transparency andconsistency in government policy and its implementation still affectentrepreneurs' attitudes toward more open approaches of doing business."
Theconference, organised annually by the Vietnam Economic Times newspaper,this year discussed "Intensive integration, fierce competition".-VNA
"The economy will truly recover, albeitslowly, thanks to good macroeconomic management, stable finance andmonetary policies, low inflation, and active restructuring ofState-owned enterprises," Tran Du Lich, a member of the NationalAssembly's Economic Committee, told the Vietnam Economy Scenario 2015conference.
To accomplish this, he pointed out that theGovernment has adopted a consistent macroeconomic policy for the lastfour years focusing on stabilising the economy rather than growing it atany price.
But he said the recovery is contingent on threeimportant conditions — economic stability, clear and transparent legalsystem, and a business-friendly administration.
"A stable macroeconomy would help companies predict the future, while a clear andtransparent legal system would help them feel secure about investing anddoing business. And a business-friendly administration would help themimprove their efficiency."
He said 2015 would be a year of intensive integration and the "opportunity is promising and challenges are real."
"Vietnamis tweaking its legal system in line with the ASEAN bloc and this willcreate favourable conditions for companies to develop and integrate."
By2015 Vietnam must complete a zero-tariff list which will include 93percent of all goods while the remaining 7 percent can carry tariffs ofup to 5 percent until 2018.
Eleven laws will be amended and take effect by the middle of the year.
VoTri Thanh, Deputy Director of the Central Institute of EconomicManagement, agreed with Lich that the economy would recover in 2015.
"Institutional renovation will need more effort but the risk will remain very high."
Accordingto deputy head of the Central Economic Commission Le Vinh Tan, theeconomic pitfalls include challenges to sustainability, growth fallingshort of potential, production inefficiency, high public debts andpressure to repay, high ratio of bank bad debts and their slowresolution, and significant fall in oil prices.
Le Xuan Nghia,member of the National Financial and Monetary Policy Advisory Council,said: "If Vietnam does not have proper fiscal policies, interest rateswill go up. Therefore fiscal policies must dovetail with monetarypolicies to keep interest rates steady or even bring them down and keepinflation under 5 percent."
He also mentioned the biggest risk for economic growth in 2015 is process to deal with bad debt.
"The legal system is not robust enough to cope with bad debts because they are governed by 11 different laws.
"TheGovernment should speedily improve the legal system [which] wouldimpact State Owned Enterprises' restructure speed and economicdevelopment."
He also listed smuggling and commercial fraud as other risks facing the economy.
"Reform of the legal system is the most important task in ensuring sustainable economic growth in the long term."
DominicMellor, the Asian Development Bank's country economist for Vietnam,warned however that it would not be easy for Vietnam to integrate intothe ASEAN Economic Community.
"Vietnam faces the challenge oftransitioning from central planning toward a more open economic model inwhich the private sector leads growth and development.
"Thelegacy of central planning and the continued lack of transparency andconsistency in government policy and its implementation still affectentrepreneurs' attitudes toward more open approaches of doing business."
Theconference, organised annually by the Vietnam Economic Times newspaper,this year discussed "Intensive integration, fierce competition".-VNA
